Leading Article: Proud to be stupid?

HOW will they pay for it all? This is the question that Tory politicians traditionally ask of Labour when they denounce it as the party of high taxation and high spending. But high taxation and high spending at least have a logical consistency. The Tory position - the party of low taxes and extravagant promises - has none whatever. Last week, the Tories promised 5,000 more police on the beat; 10,000 extra closed-circuit cameras in town centres; 34,000 more assisted places in public schools; and (if Michael Howard's new sentencing and remission policies are implemented) enough room in the prisons for 21,500 additional inmates.

Where will the money come from? Health? Though Stephen Dorrell, the Secretary of State for Health, promised a 5 per cent cash cut in spending on administration, he stated specifically that the pounds 140m released would be for improved patient care. Education? Gillian Shephard, the Secretary of State for Education, has potentially expensive additional commitments to financing nursery places for four-year-olds and a new professional qualification for headteachers. In any case, the Prime Minister promised last year (didn't he?) that schools, after doing badly in the public spending round, would do better in 1996. Benefits? Peter Lilley's promise to crack down on asylum seekers is estimated to save pounds 200m. But higher inflation is already pushing the cost of next year's social security budget up by pounds 650m more than forecast. The pounds 6bn contingency reserve? But isn't that supposed to be for ... well, contingencies? Such as departments overshooting their spending targets - as they do almost inevitably in an election year?

But by now we should know how the Tories will square their circles: they will pile taxes on the poor. The Tories are not the party of low taxation at all - they are the party of low taxes for the better-off. Since the last election, increased taxes have amounted to the equivalent of a 7p lift in the basic rate of income tax. This increased burden has been borne disproportionately by those on average and below-average incomes. That is nothing new: throughout their term of office, the Tories have increased the amount coming from indirect taxes, such as VAT, which hit the poor hardest. The Tories make no apology for such injustices. On the contrary, they propose to compound them. John Major announced in his speech on Friday that the ultimate aim is to abolish both inheritance and capital gains taxes, which fall almost entirely on the well-off. Last week, almost everybody in Blackpool was talking about another cut in the basic rate. Almost nobody advocated an increase in allowances by, say, pounds 450. Yet, as our Inside Story shows today (page 13), the latter would take 900,000 low earners out of tax entirely while another 750,000 would have to pay only at the lower rate of 20 per cent.

That is the crude truth behind all the Tory rhetoric, behind Michael Heseltine's fine phrases about the opportunity state, the enterprise economy, the new world dawning, setting the people free in a cleaner, greener, healthier Britain. The rich get richer through high boardroom salaries, share options and lower taxes and the poor get poorer through squeezed benefits, higher taxes and (for hundreds of thousands who bought their council houses) negative equity. And increasingly such crude truths stand out. The great Tory projects are complete. The over-mighty trade unions have been tamed to such an extent that a strike has become almost a legal impossibility. Market principles have been applied to schools, hospitals, universities and a host of previously nationalised industries. We are left only with what may be described as gut Toryism: Michael Portillo's appeal to crude nationalism; Michael Howard's appeal to the desire for revenge (which is not the same thing as justice) against criminals; Peter Lilley's appeal to the respectable classes' contempt for the riff-raff; Brian Mawhinney's appeal (in his blundering reference to a Labour council's grant to an Asian women's group) to mockery of the earnest and well-intentioned. And the appeal of nearly all Tory leaders to greed and self-interest. Margaret Thatcher, too, was frequently guilty of a crude appeal to the popular gut but her vision made it seem for a time that her party represented something larger. Now, once more, the Tories are just what John Stuart Mill called them in 1861: the stupid party.